Dispatches from the world of academic marxism

Marxism and Monetary Theory: A Bibliography

Since reading David Graeber’s Debt last fall, I’ve become interested in the relationship between Marxist economic theory and the heterodox theory of money Graeber supports in his work. Graeber holds to a chartalist position, which argues that money is not, as the classic account in Carl Menger goes, simply the most salable commodity, but rather a symbol that has value because the state requires us to pay taxes in it. Though this theory of money dates back to Aristotle, today it has been developed into the body of theory known as ‘Modern Monetary Theory.’

MMT’s focus on the role of the state in making money gives it a very different emphasis from Marx’s analysis in the first three chapters ofCapital. There, Marx argues for something quite similar to Menger, drawing an account of the way that a society based on commodity production has need for one commodity to serve as a universal equivalent. In other words, monetary theory appears to make for strange bedfellows. On one side, we have the neo-classicals, the Austrians, and Marx. On the other, the left-leaning post-Keynesians. What to make of all this?

Personally, I’m pulled by the arguments of MMT. As I began researching what Marxists had to say on the subject, I was relieved to find a number of them arguing that value theory does not require commodity money, and that Marx himself in the later volumes of Capital appears to recognize this. Others, however, argue that capitalism does require a commodity basis for money. David McNally’s recent work, probably the most sophisticated Marxist appraisal of the current crisis we have, lends support to both positions, in a way. On the one hand, his argument for a neoliberal boom clearly implies that capitalism can go through substantial periods of accumulation without a commodity based currency. On the other hand, he argues that the waves of financialization that accompanied this boom, and lit the fuse for the bust, were themselves a product off capital’s need for a different kind of universal equivalent, since money itself was no longer playing that role.

Really, I have no idea where I stand in all of this, having nowhere near the requisite knowledge to judge the debate. But I thought while I’m reading up on the question, I may as well post a bibliography to make it easier for other folks interested in doing the same. Here it is.

thanks for the bibliography, and for your thinking in general. I’m a new reader, but plan to be a regular visitor here in the future.

On the question of the relation between Marxian commodity money and chartalism: although I’ve not read Graeber, it’s not surprising that, being a good anarchist, he should come down in favor of a theory that locates the ultimate value of money in the prerogatives of the state. One way of parsing out the differences between these approaches, though, might be to hash out their respective accounts of what happens in a capitalist crisis, particularly with reference to the question of value. I’d be interested in hearing your thoughts on that, if you’ve got the time.

I think that’s a major failing in Graeber’s approach. His account of why things happen in capitalist economies is either hopelessly vague or completely wrong. For example, he argues that the crisis of the 1970s amounted to a ‘crisis of inclusion,’ in which subaltern movements demanded the social democratic deal offered to white male workers after world war ii, and in the process crashed the system because it couldn’t handle distributing prosperity to that many people. This is quite clearly wrong a number of levels. First, as Chris Harman has argued, profit-squeeze theories simply can’t explain the crisis of the 1970s. Second, even the most privileged white male workers in the US still received far less than workers in countries with actual social democracy. There, workers claimed a far higher level of prosperity than in the US, so it seems that higher standards of living for subaltern classes don’t necessarily push the system into crisis (this isn’t to suggest that the destruction of Jim Crow wasn’t a crisis for the capitalist class. It was. But it’s terribly mechanistic to think that every crisis for the ruling class is a crisis that finds expression in the balancesheets).

Am relatively new to the MMT theories but am intrigued and was therefore interested in how they either did or did not relate/are reconcilable with Marxist economic analyses (though i recognize that there is not ONE universally accepted view e.g., I believe that Andrew Kliman’s work rejects the dominate view that the economic crises since the 70s are not due to Marx’s notion of falling rate of profit…I haven’t read harman’s earlier work but have read numerous “marxists” accounts of the latest crisis and they all seem to rest on notions of globalization/financialization rather than a profit squeeze but Kliman’s work has a very different take (and he makes a very persuasive arguement i think). so, i’m curious, how an MMTer would either accept or reject Marx’s notions of the labor theory of value as well as the tendency for the rate of profit being the cause of capitalist economic crisis?

Dan, Kliman’s case only works super-persuasively if you do two things: 1) accept all pensions and health benefits at face value for their paper worth and 2) adopt a gold standard. If the capitalists are robbing the pensions, if the insurers are giving you much less money than you were promised when you gave up a dozen pay raises in a row, and if you use purchasing power, Kliman’s history and his numbers are simply wrong. But his approach is based on the first part of Marx’s Capital, mentioned in the post: “Marx argues for something quite similar to Menger, drawing an account of the way that a society based on commodity production has need for one commodity to serve as a universal equivalent.” That said, I agree with Kliman that in the end the rich don’t really need the poor to spend money, they can shift to a luxury economy. In that sense, the underconsumptionists might be more wrong than right, outdated like the average American who believes in “consumerism” ala Ralph Nader or worse “consumer sovereignty.” I think the FRoP people, valuing in gold, and the underconsumptionists are explaining exactly the same crisis in capitalism – just ponder how it looks if you accept Kliman uncritically but notice that fewer people are in the working class getting the benefits. They’re just emphasizing different elements going into it. It would also be theoretically possible to reconcile MMT with even Kliman’s take (easy with Wolff’s), i think, since MMT doesn’t hand wave away commodity units of exchange per se. Tom O’Brien of From Alpha to Omega podcast says that might be fruitful. Then there are neo-Ricardian critiques of the labor basis of value, which Kliman mostly addresses.

Your knowledge is still quite poor.
Marx is still superior to mmt, since he had a deeper knowledge of capitalism, though Randal L Wray has done a great job and he gets on the spot.
BTW it happens that Randy has pointed to the right problems while many so called marxists do not understand well Marx neither money.